Inequality killed the American dream

As wages stagnate and costs rise, US workers recognize the guiding ideal of their nation for a delusional myth

By Gary Younge / The Guardian

Illustration: Mountain People

The final chapter of America’s Promise, a high-school textbook on US history, ends with a rallying cry to national mythology. “The history of the United States is one of challenges faced, problems resolved, and crises overcome,” it states. “Throughout their history Americans have remained an optimistic people, carrying this optimism into the new century. The full promise of America has yet to be realized. This is the real promise of America; the ability to dream of a better world to come.”

Such are the assumptions beamed from the torch of Lady Liberty, coursing through the veins of the nation’s political culture and imbibed with mothers’ milk. Their nation, many will tell you, is not just a land mass, but an ideal — a shining city on the hill beckoning a bright new tomorrow and a dazzling dawn for all those who want it badly enough. Such devout optimism, even (and at times particularly) in the midst of adversity makes the US, in equal parts, both exciting and delusional. According to Gallup, since 1977 people have consistently believed their financial situation will improve next year even when previous years have consistently been worse.

When US President Barack Obama was planning his run for a second term his pollsters noticed a profound shift in the national mood. The optimism was largely gone — and with it both the excitement and the delusion. The time-honored rhetorical appeals to a life of relentless progress, upward mobility and personal reinvention didn’t work the way they used to.

“The language around the American dream wasn’t carrying the same resonance,” Joel Benenson, one of Obama’s key pollsters, told the Washington Post. “Some of the symbols of achieving the American dream were becoming burdens — owning that house with the big mortgage was expensive, owning two cars and more debts; having your kid go to college. The cost and burden of taking out those loans was making a lot of Americans ambivalent. They weren’t sure a college education was worth it.”

This was not just about the recession — though of course that didn’t help — but a far more protracted, profound and painful descent in expectations and aspirations that has been taking place for several decades. For underpinning that faith in a better tomorrow was an understanding that inequality in wealth would be tolerated so long as it was coupled with a guarantee of equality of opportunity. In recent years they have seen both heading in the wrong direction — the gap between rich and poor has grown even as possibilities for economic and social advancement have stalled.

Between 2007 and 2010 the median US family lost a generation of wealth, putting them on a par with where they were in 1992. Last week the census revealed that median household income is roughly the same as it was in 1988 and that the poverty rate had actually increased since 1973. Meanwhile, median male earnings in 2010 were on a par with 1964. This is not for want of effort. US workers continue to make gains in productivity and US companies continue to reap the benefits. Last year corporate profits, as a share of the economy, were the highest since the second world war. The trouble is, none of the benefits went back to them.And while wages have stagnated and wealth has dissipated, costs have shot up. A family’s health insurance contributions have increased 90 percent over the past decade. Over the past five years tuition costs have leapt 27 percent at state universities and 13 percent at private institutions above inflation. A nation that has long prided itself on being forward-thinking is reconciling itself to going backwards.